Volume 21, Issue 3

Real-time review systems are frequently used in various sports to monitor the decisions of referees and correct their mistakes. Interventions through these systems cause delays in games, which are perceived as being costly. This makes it optimal for these review systems to interfere with the decisions of the referee less frequently than would minimize the costs of decision errors, which I formalize through an analysis of the VAR system in football. This analysis also reveals that optimal review standards ought to be laxer when an important event (e.g., a goal) occurs between the position in which the potential error took place and the VAR intervention. In the near future, it may be possible to introduce similar review systems in the law enforcement context, e.g., by utilizing police officers’ body cameras. I compare optimal intervention standards in this context to their analogues in the sports context, and discuss implications.

After 20 years since the U. S. Supreme Court ruling in Kelo v City of New London , the academic literature has mostly dried up. Yet cases of economic development takings continue to emerge across the country. This paper revisits some of the main issues from a law and economics perspective. What are the long-term effects of the Kelo ruling and the state reforms it spawned? How effective have regulations been in accomplishing their goals of reducing inefficient economic development takings? We review the quantitative literature that compared the 50 states’ legislative and judicial responses to Kelo , and then present a comparative case study of two states: Michigan, which enacted significant reforms, and North Carolina, which enacted relatively mild reforms. Over time, developers and local or state authorities explore increasingly creative ways to extract rents through loophole mining, boosted by a diminished spotlight. Thus, relatively strong takings powers that may appear efficient in the short run may, in the long run, lead to greater inefficiencies than intended, implying that stricter regulations may become more necessary in the long-run to maintain efficiency.

This paper develops a mathematical model of the criminal’s decision to launder money, in order to analyze the relationship between anti-money laundering (AML) policy and the incentive to commit crime. The model includes a measure of the value of dirty income for direct usage in consumption and investment, which is contrasted with the value of laundered money. The results demonstrate that increases in the strictness of AML policy cause criminals to shift away from laundering and towards spending dirty income directly. To the extent that dirty income provides a positive utility on the margin, deterrence effects from AML will be incomplete, as criminals are deterred from crime but not from laundering. Additionally, the value of dirty income is shown to present a confounding influence on the use of changes in money laundering volume to assess criminal welfare. These results suggest that efforts to improve AML regulations may be less effective at combating crime than previously supposed, and highlight the need for further research to understand how criminals use dirty income.

This study develops a theoretical framework to examine prostitution markets and discusses the appropriate regulation to enhance social welfare and prevent the spread of sexually transmitted infections and sexual abuse. We introduce a high-quality prostitution market with intermediaries (e.g., brothel owners) to provide high-quality services (e.g., formal worksites) and a low-quality prostitution market without intermediaries (e.g., informal worksites). This study demonstrates two key findings regarding regulation. First, strict regulation in high-quality markets can inhibit the beneficial activities of intermediaries, leading to lower social welfare. This suggests that lax regulation may be optimal in high-quality prostitution markets. Second, strict regulation in low-quality markets can have the opposite effect, as it encourages intermediaries’ activities and potentially increases social welfare, supporting the case for stricter regulation in low-quality prostitution markets. This study provides a new perspective on the discussion of appropriate regulations.

This paper casts a critical eye on the role of efficiencies in the 2023 Merger Guidelines. This analysis addresses mergers that reduce production costs, those that reduce transaction costs, and those that improve product quality. In addition, this paper examines the antitrust treatment of mergers that change the market structure and thereby improve both consumer and social welfare. These include mergers of successive monopolists, mergers of complementary good producers, and mergers that create bilateral monopoly.